The move is a step toward protecting the health insurance marketplace created by the Affordable Care Act, also known as Obamacare.

The federal landmark health care law requires individuals to buy a policy if they do not have one or face a fine at tax time. The law was meant to ensure younger and healthier people who might otherwise forgo insurance will participate in the insurance market and share costs.

But the tax package approved by the Republican-led Congress and signed into law by Trump in November ended the so-called individual mandate after this year. Experts predict the health exchange will be jeopardized because it will be dominated by sick or older policy holders, driving up premiums.

To stave off that from happening, the state Senate Budget and Appropriations Committee approved (S1877) that would give the state the authority to impose the individual mandate and collect a fee from people who do not buy insurance.

The committee approved the bill by a 8 to 3 vote with 1 abstention, backed exclusively by Democrats.

"The federal tax law recently adopted by President Trump included the repeal of the individual mandate," said Sen. Troy Singleton, D-Burlington, who sponsored the legislation. "The magnitude of the consequences of that decision will usher in an era of higher health insurance costs for everyone and lower health coverage rates."

In 2015, 189,000 New Jerseyans collectively paid $93 million, or roughly $500 in fees, rather than buying coverage, according to IRS data collected by the research institute, New Jersey Policy Perspective.

The state Treasurer would decide whether people who do not buy coverage are exempt from paying the fee because they cannot afford it, or for religious reasons.

Sen. Declan O'Scanlon, R-Monouth, said he worried the bill would place a financial burden on millennials, who are fleeing the state.

"I have some concern about the impact on millennials who can't afford to live here," O'Scanlon said.

The fees collected would be deposited in the New Jersey Health Insurance Premium Security Fund, created by a second bill the committee approved on Monday, (S1878). This fund would help pay the claims of people who are catastrophically ill, so the larger pool of covered people do not see their rates rise dramatically.

The committee approved this bill by an 8-4 vote.

"Through the Affordable Care Act and the accompanying expansion of Medicaid and the federal subsidies, New Jersey's uninsured rate dropped from 13.2 percent to 8.7 percent over six years, the lowest rate in three decades," said Sen. Joseph Vitale, D-Middlesex, who sponsored the bills with Singleton.

The Murphy administration would have to apply by the end of the month to the U.S. Centers for Medicare and Medicaid Services for permission to create the "reinsurance fund," apply for federal funds to help operate it, and disburse money to insurance carriers to pay claims, Vitale said.

"These bills will help stabilize the insurance market and preserve the viability of the individual mandate," Vitale said. "Having as many people as possible in the insurance program makes it more affordable for everyone."

Jason Levitis, a senior fellow at the Solomon Center for for Health Law and Policy at Yale Law School, told the committee that Alaska, Minnesota and Wisconsin have passed a similar law. He expected premiums will decline by a range of 6 percent to 25 percent.

Reinsurance funds provide "an opportunity for the state to receive federal dollars to reduce premiums and to save the federal government money," Levitis said.